Stay bullish and buy dips in the S&P 500 because it will keep grinding higher, says this strategist

2 months ago 17

That grind higher should continue, with the blue-chip scale heading for much highs ahead, according to fiscal newsletter The Kobeissi Letter successful our call of the day.

Published by Adam Kobeissi, the newsletter noted that the latest grounds was reached aft “not the astir eventful” week successful presumption of fundamentals — “but a deficiency of developments is mostly bullish successful a marketplace with sentiment arsenic bullish arsenic it is.”

There are immoderate insignificant bearish factors facing the S&P 500 SPX, +1.13% scale successful the abbreviated term, Kobeissi said. These see COVID-19 concerns driving volatility, and headwinds against Big Tech stocks similar Amazon AMZN, -0.32%, Alphabet GOOGL, +0.38%, Apple AAPL, +1.31%, and Facebook FB, +1.38% from President Joe Biden’s caller executive bid connected contention successful the sector.

Looking past this, “we person the Fed’s continued supportive measures and grounds levels of capitalist optimism fueling the propulsion higher for the S&P 500 and we expect it to continue,” said Kobeissi.

The scale is utilizing abbreviated word pullbacks — adjacent of conscionable 1% oregon 2% — to trap caller abbreviated positions and unit them to screen their shorts, yet buying backmost into the rally, the strategist said. 

“This is wherefore the dependable grind higher has been proliferated and we besides expect this to continue, meaning dips are large opportunities to summation agelong vulnerability successful this market,” said Kobeissi.

The scale conscionable astir touched 4,370 points connected Friday, and, from a method perspective, the radical of strategists believes this determination has momentum to propulsion to 4,400 points earlier the adjacent short-term pullback occurs.

“We person shifted backmost to a bullish outlook for the S&P 500,” said the strategist. “We proceed to judge that shorting this marketplace is simply a unsafe crippled and dips are readily buyable successful these conditions.”

The tweet

The buzz

Tesla TSLA, +0.63% Chief Executive Elon Musk is acceptable to attest successful a Delaware court astir the company’s $2.5 cardinal acquisition of SolarCity successful 2016. The acquisition is the people of a shareholder suit alleging that Tesla’s woody for the solar-panel shaper had conflicts of interest, overlooked weaknesses successful the group, and failed to nutrient promised results.

ByteDance, the Chinese proprietor of fashionable societal media video app TikTok, indefinitely enactment connected clasp its volition to database offshore, aft it was warned astir information information risks by authorities officials earlier this year, The Wall Street Journal reported. Chinese regulators person precocious cracked down connected U.S.-listed tech groups, similar ride-hailing app Didi DIDI, +7.31%.

“Black Widow” enjoyed the champion home opening play for a movie since earlier the COVID-19 pandemic, Walt Disney DIS, +2.45% said connected Sunday, aft its superhero movie generated astir $80 cardinal successful North American summons sales. The movie made different $78 cardinal from planetary theaters and much than $60 cardinal successful streaming rentals.

China volition instrumentality “necessary measures” in effect to the U.S. blacklisting of respective Chinese companies implicit their alleged relation successful quality rights abuses against Uyghurs and different Muslim number groups. The U.S. Department of Commerce said connected Friday that 14 companies added to its Entity List “enabled Beijing’s run of repression, wide detention, and high-technology surveillance” successful the Xinjiang region.

Billionaire septuagenarian entrepreneur Richard Branson accelerated the tourism abstraction race connected Sunday, launching much than 53 miles supra the New Mexico godforsaken with 5 crewmates from his Virgin Galactic SPCE, -6.62% group. Branson’s ngo comes much than a week earlier Amazon laminitis Jeff Bezos makes his ain travel to space.

The markets

U.S. banal marketplace futures YM00, -0.31% ES00, -0.06% were pointing lower, with the technology-heavy Nasdaq NQ00, +0.41% comparatively stronger. Equities slipped successful Europe SXXP, +0.23% UKX, -0.41% PX1, -0.02% DAX, +0.10% portion stocks successful Asia rallied NIK, +2.25% HSI, +0.62% SHCOMP, +0.67%, arsenic markets determination had a archetypal accidental to respond to China cutting reserve requirements for banks.

The chart

Chart from Capgemini via the Irrelevant Investor blog.

More than 200,000 radical astir the satellite person a nett worthy of much than $30 million, representing 1% of the colonisation of millionaires but 34% of the group’s wealth, according to Capgemini’s World Wealth Report.

Our illustration of the day, via Michael Batnick of the Irrelevant Investor fiscal blog, shows Capgemini’s dive into the millionaire cohort to look astatine the dynamics of wealthiness organisation wrong the rich.

Random reads

Mamma mia, Mario: An unopened transcript of Nintendo’s 1996 “Super Mario 64” crippled sold astatine auction for $1.56 million. Talk astir a divers asset.

A pistillate successful China deliberately ran 49 reddish lights successful her ex-boyfriend’s car, racking up fines successful revenge aft helium near her for different woman, according to a report.

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